German debt yields fell to record lows after data showed euro-area consumer prices dropped this month by the most in a year.

That bad outcome fuelled the prospect of the European Central Bank (ECB) expanding its monetary stimulus program in March to boost growth and inflation.

Irish bond yields fell marginally to 0.86pc on 10-year debt, but that marked an underperformance against German bunds.

"One reason bunds have done well is the decline in oil prices that have led inflation expectations to drop quite significantly and is pushing the ECB into doing more easing," said Allan von Mehren, chief analyst at Danske Bank.

In Dublin the NTMA bought back and cancelled €850m of bonds earlier that are due to be redemmed in April. While bonds were seen as a haven, European shares retreated from a three-week high yesterday and were on track for their third straight month of losses after a weekend meeting of the G20 group of leading economies failed to agree new measures to boost growth.

In Dublin the Iseq index closed up 1.53pc at 6,333.20. The pan-European FTSEurofirst 300 index was down 0.3pc in late trading.

The index reached a three-week high last week but was still on track for its third straight month of losses due to investor concerns over the global growth outlook.